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January 9, 2023

Charted: How managers and employees view remote work

Daily Briefing

    Writing for the Harvard Business Review, Nicholas Bloom, Jose Maria Barrero, Steven Davis, Brent Meyer, and Emil Mihaylov outline survey findings that identify the key differences between managers' and employees' perspectives on remote work.

    Nicholas Bloom is a professor of economics at Stanford University. Jose Maria Barrero is an assistant profcssor of finance at Instituto Tecnológico Autónomo de México. Steven Davis is a senior fellow at the Hoover Institution. Brent Meyer is an AVP and economist in the Federal Reserve Bank of Atlanta's research department. Emil Mihaylow is a senior economic research analyst at the Federal Reserve Bank of Atlanta.

    Conversation guide: Your organization's approach to remote work considerations

    Managers' vs. employees' views on remote work

    According to the authors' research, managers and employees "disagree profoundly about key aspects of work-from-home." For example, while managers believe working from home reduces productivity, employees believe it increases productivity significantly. 

    In part, the disagreement seems to stem from how people define productivity. "Employees tend to include commuting time in their mental calculation, and so they think not having to commute when they work from home counts as an increase in productivity," the authors write. "Managers tend to ignore commuting time when they think about productivity: They just care about how much work is getting done each day."

    The authors explain that both viewpoints could be correct. For instance, if a worker who billed $1,000 a day before the COVID-19 pandemic worked nine hours plus one hour of commuting, they produced $100 for every hour working or commuting. If the same employee started working from home, commuting zero hours, and still working nine hours, a bill of $950 a day marks an increase in productivity from their perspective, producing $106 for every hour worked.  

    However, their manager may have a different perspective. Since managers do not include commuting when evaluating productivity, they would claim that the worker was producing $111 per hour pre-pandemic. From the manager's perspective, the worker's productivity has fallen from $111 an hour working in an office to $106 working from home. "If the employee's salary has stayed the same, the firm is getting less output for their money," the authors note.

    "These are made-up calculations, and most workers' output can't be calculated this way — even if people thought like this," they add.

    Still, this example demonstrates how important the commuting disconnect can be when explaining the different perceptions managers and employees have of productivity. "The answer depends in part on what gets counted," the authors conclude.

    In addition to disagreeing on how remote work impacts productivity, managers and employees also have different opinions on the consequences of not coming into the office on an in-person day.

    The authors asked managers and employees what they think happens to workers who stay home on "work days." Overall, employees were more likely than managers to say that "nothing" happens, and managers were more likely to say that the worker was at risk of being terminated.

    How companies can address the discrepancy

    "These differences in opinion reflect the need for more clear-cut policies on working from home," the authors write. "The best available approach for most companies is organized hybrid."

    According to the authors, companies should select specific "anchor" days where all employees are required to come into the office. During in-office days, teams should schedule the bulk of meetings, group activities, trainings, and lunches to help employees see the value of meeting in person. "And attendance should be enforced the same way it was pre-pandemic: Not coming to work on anchor days is not acceptable, except in the case of emergencies, like a sick child or a burst water pipe," the authors add.

    Managers should actively encourage employees to work from home on non-anchor days—a move the authors say will allow employees to enjoy the benefits of working from home without worrying that they're missing something at the office.  

    "It's natural that a massive shock to working conditions like working from home would cause disagreements between employees and managers, but we've had more than two years to navigate this change and the outlines of the new era are coming into focus," the authors write.

    "The best evidence we have suggests that organized hybrid raises employee and firm productivity," they add. "Managers and employees need to get on the same page." (Bloom et al., Harvard Business Review, 1/5)

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